MARKET WATCH: NYMEX crude prices gain despite higher US gasoline inventories
US light, sweet crude oil futures for June rose modestly in New York but settled under $48/bbl for a second consecutive day May 3 while Brent crude oil prices on the London market also rose modestly and settled under $51/bbl.
Oil prices rose after a weekly government reported showed a decline in US crude inventories and another unexpected increase in gasoline supplies. Analysts have said high gasoline inventories drag down oil prices at this time of year. Typically, early May provides a seasonal draw for gasoline supplies.
“The market is looking for overall stock draws as evidence that the OPEC cuts are indeed driving global rebalancing,” said Societe Generale. “This week’s US figures did not provide that evidence.” Brent crude oil prices dipped below $50/bbl on London’s ICE Futures exchange on May 4, briefly touching its lowest level since Nov. 30, 2016.
The Energy Information Administration said US commercial crude oil inventories, excluding the Strategic Petroleum Reserve, decreased 900,000 bbl for the week ended Apr. 28 to a total of 527.8 million bbl. Total motor gasoline inventories increased 200,000 bbl for the week.
The Petroleum Status Report also said US oil production reached 9.293 million b/d for the week ended Apr. 28, which was a 28,000-b/d gain. The Lower 48 contributed 25,000 b/d of that gain in production for a 8.767 million-b/d total while Alaska production was up 3,000 b/d to 526,000 b/d.
The Organization of Petroleum Exporting Countries meets in Vienna on May 25 to decide whether to extend its production-cut targets that started in January. OPEC members and some non-OPEC producers agreed to cut production by a total 1.8 million b/d in efforts to reduce world oil inventories and support oil prices.
Energy prices
The light, sweet contract for June crude oil delivery gained 16¢ on May 3 to close at $47.82/bbl on the New York Mercantile Exchange. The July contract rose 19¢ to settle at $48.18/bbl.
The natural gas price for June gained 3¢ to a rounded $3.23/MMbtu. The Henry Hub cash gas price fell 2¢ to $3.09/MMbtu on May 3.
Heating oil for June edged up less than 1¢ to remain at $1.47/gal. Reformulated gasoline stock for oxygenate blending for June rose 2¢ to a rounded $1.53/gal.
The Brent crude contract for July on London’s ICE climbed 33¢ to settle at $50.79/bbl. The August contract gained 31¢ to $51.07/bbl. The May gas oil contract fell $6.75 to $440.25/tonne.
OPEC’s basket of crudes was $48.34/bbl on May 3, down 63¢.
Contact Paula Dittrick at [email protected].
About the Author
Paula Dittrick
Senior Staff Writer
Paula Dittrick has covered oil and gas from Houston for more than 20 years. Starting in May 2007, she developed a health, safety, and environment beat for Oil & Gas Journal. Dittrick is familiar with the industry’s financial aspects. She also monitors issues associated with carbon sequestration and renewable energy.
Dittrick joined OGJ in February 2001. Previously, she worked for Dow Jones and United Press International. She began writing about oil and gas as UPI’s West Texas bureau chief during the 1980s. She earned a Bachelor’s of Science degree in journalism from the University of Nebraska in 1974.